Why The Rest Should Learn From The Best

Instead of implementing successful policies from developed southern states like Tamil Nadu in the northern ones, the Centre wants to homogenise. This could be economically catastrophic

- PALANIVEL THIAGA RAJAN

IN 1990, India, with a per capita income of $368, and China, with $318, stood on the same ground. Though China had started liberalising in the late 1970s, its growth had not reached peak acceleration yet. But the ensuing 30+ years were clearly China's era, as its increasing dominance in global manufacturing, trade and currency reserves resulted in probably the greatest wealth creation in history. China's per capita income has surged to $12,614—about five times India's current level of around $2,480.

We are now entering a new era, one in which enlightened policy and nimble positioning can produce a few decades of similarly stunning growth and prosperity for India. As China's role in the global economy declines due to an ageing population, and as global investors and trading partners actively de-risk their China exposure, India can become the new engine of growth for the global economy.

We possess the essential ingredients—the largest pool of young human capital, the capacity for global economic integration (not least through English), and the demographic dividend that can lead to the multiplier effects of increasing domestic consumption. To enhance our per capita productivity, which can yield sustained double-digit growth rates, we must equip millions of young Indians with skills for the integrated global market. The best way to achieve such outcomes throughout India is to extract lessons from the best performing states such as Tamil Nadu, and replicate these policies and practices in states with poorer outcomes, thereby improving the national average.